Cornwall Insight

The Australian Renewable Energy Agency is one of those rare institutions that managed to survive the political energy battles over the last decade. Initially established in 2012, the federally funded agency has dispensed more than $1.9 billion (USD 1.2 billion) in funding to date to support renewable technologies, often at the ‘pre-commercial’ stage.

In a bit more bad news for everyone already struggling with the current energy crisis, modelling from Cornwall Insight Australia forecasts that prices will remain at increasingly high levels for the next three years, after which they will flatten but are not likely to lose their volatility in the longer term.

It has been a chaotic few weeks on the east coast, culminating with the national electricity market being suspended on 15 June 2022, an outcome not seen in the modern version of the NEM. There has been much coverage of the key drivers of the crisis. It stems predominantly from a perfect storm of two main factors: thermal unit outages and high thermal fuel costs, as the NEM largely relies on thermal generation.

The potential early retirement of Eraring has been the talk of the market the past week. Many of our customers have been asking what the impacts of the retirement might be on the acceleration or development of new renewable capacity in NSW and potential storage projects. In this Chart of the week, we look at the effect of the lost generation from Eraring and how that capacity might be filled.

After the deluge of announcements last year, 2022 will see the trickle of big batteries actually operating in Australia turn to a flood. According to Rystad Energy, the country’s battery capacity is set to double before the year is out.

Less than a year ago and energy market analysts Cornwall Insight Australia projected a battery energy storage pipeline of 7 GW. This week the firm has updated its outlook and puts Australia’s current pipeline of proposed projects at over 26 GW. What is more, the technical lifetime of these assets is increasing too.

We are just through the first two weeks of 5-minute settlement. While there has been much anticipation regarding the implementation and the potential for drastic swings in prices, we felt it was an excellent time to take a quick look at the pricing outcomes to see if any immediate trends are emerging.

The latest news in the NEM is AEMO’s goal to be capable of handling periods of 100% instantaneous renewables penetration by 2025. This is a significant challenge and fitting given the pace the NEM is moving to
supporting increasingly higher levels of instantaneous (and increasingly asynchronous) renewables on a regular basis.

New analysis from Cornwall Insight Australia has put Australia’s current battery energy storage pipeline at 7 GW. Of course, the vast majority of that projection is still firmly in the proposal phase, but the over 900 MW of energy storage thought to be developed by 2024 is still far in excess of AEMO’s ISP 2020 forecast, begging the question, how is the NEM going to fit it all in?

An energy executive in transition, Alba Ruiz Leon combines recent learnings as head of the team that built Limondale with the analytical resources she now commands as leader of Cornwall Insight Australia.